-- no one else would get this publicity if it was not the president son. secondly,■f the judge indeed mae donations to the democrats and he was good enough to go to an ethics committee and asked their opinion, whether he should stay on the case. i think trump should do the same. he should go to an ethics committee and asked if he is qualified to run for president. that is my comment, thank you. host:gé any part of the trump trial or the hunter biden file you want to pick up on? guest: this is the sentiment we have heard among quite a few democrats. democrats have repeatedly called the republican target of hunter biden as a way of getting at the prenwe'll have to see how this l

plays out this week. host: watertown, tennessee. al. independent. caller: when his politico going to issue an apology? politico pushed to the notebook is russian disinformation. even >> we are going to leave this program at this point. you can continue watching on c-span.org. we will go to a discussion on computer chips from the aspen institute. live coverage on c-span. >> really well done, so please grab a copy. with that i am happy to give the floor to tim geithner, 74 the treasury secretary. [applause] >> this group that hank and i co-chair was founded in 2017?

yeah. and the basic mission is to help encourage a bipartisan conversation about ideas, about evidence-based solutions to the hardest, toughest economic policies we face. they are responsible for bringing us together to day. this is the center of one of the great debates in american policy, how to craft american strategy in a more dangerous world, what level of trade and economic integration is consistent with the nationals a good interests, what level of integration is important to sustaining a commanding advantages in innovation today, what technologies do we need to protect and defend, or do we actually need to build in the u.s., and what level of resilience is necessary in what industries and technologies, what is the right mix of

subsidies, tax incentives, protection, investment, and export restrictions. we were the leader -- the u.s. was the leader in the design and manufacturing of the first microchips in the 1950's and 1960's, and that was built on a mixture of private capital and government support. a messy mix, a messy process that would change what we think we know -- challenge what we think we know about governments and markets and what works and what doesn't. gave up part of it in manufacturing, the process of trying to figure out how to regain the ability to build a meaningful share of the world's mr. vance chips in the u.s. this -- world's most advanced chips in the u.s. this is complicated and hard and consequent. we have three great people er through the topic. mike schmidt, who is responsible for deciding how to allocate the

dollars and the tes f the grant. chris miller is the author of "chip war," the definitive, excellent history of how we got here. and greg ip is correspondent for "the wall street journal," and he will moderate. ppe] greg: it really is a privilege to be appeared to be speaking to chris and mike, 2 excellent people have gotten to know studying this topic. my last hands-on experience with chips was their use ago when i was editor of our college paper and i got to open an open take the memory card out. since then i've basically blank on everything related. but i corrected that problem by picking up chris's book. i paid him the ultimate compliment, irc went and bought the book --i actually went a it is very informative and

readable. care about semiconductors so much. we make a lot of things can we outsource a lot of things. international trade is about specializations. how are chips different from oil, cars? how are semiconductors special and why do we have to have a domestic supply of these things when we don't feel that way about anything else? >> chips are like oil in some ways and that everything relies on them. we need energy for every aspect of our economy and we need chips for every aspect of the manufacturing base, for microwaves to dishwashers to a new car, which has an average of 1000 chips inside. it is basically everything manufactured which one often requires. but they are different from oil in an important way, which is that oil is basically all the same, whereas chips are all different. there are different types of chips prsome factories produce ,

other countries produce others. you dig into the supply chain of chips, they found that they were sourcing chips from dozens of companies in a number of different countries, and they found that the world is increasingly reliant on a smaller number of countries that provide their chips, and the most important example is taiwan which produceschips, in your pha and 100% of the gpu chips that make artificial intelligence possible. there is no other industry that is simultaneously critically important to the entire economy and concentrated in one country. greg: why is it important that we have our supply in the? s: my view is if there are multiple suppliers that are resilient, we don't have to worry about earthquakes or even if they weren't produced in the united states. but that is not the reality. there is one company and one country producing all of them, and that is a situation that

becomes even more concentrated as time has passed. we have more concenation today than we did a couple years ago. it is a we government policy that is going to change. greg: speaking of government policy, you and i have talked about it a number of times over the years. why is it important that the united states has its own supply chcountries? --friendly countries? give us a progress report on how the program is doing. michael: i like chris's frame. i think the goal is a more resilient global supply chain. and then the question is what is the u.s.' role in achieving that outcome. the way think about it is the u.s. has a really important role to play. why? we are a big part of a global ut a quarter of the global economy. so that is just an important starting point. and then we have tremendous

national assets to b on solving the problem. tremendous workforce natural resources, and very importantly, we are the location of the world's major buyers of chips, particularly on the leading edge. so all of that works together to say the united states has a really important role toand beie diversified global supply chain. and i think you are seeing that inow the chips program is unfolding. i think the results thus far are pretty extraordinary. we have, fi -- we have the first set of investments happening at an extraordinary scale, more than $300 billion of committed investments. those are investment that have not only been announced, but actual money going into the

ground. since the chips act passed, there's more investment in electronic manufacturing happening in this country than in the previous 26 years combined. youe a hockey-stick impact in terms of actual investment as a result of the chips act. intel's investment program, over $100 billion, the largest fight company in the history of this country. $55 billion in arizona, the largest foreign direct investment in history. roughly $45 billion in texas, the second largest. the scale of what we're doing here is truly extraordinary. i think the diversity of the firms that we are attracting to nest in the united states is truly:4e+ordinary. chris talked about concentration. concentration is not only geographic, it is in firms. =%there are only five firms in e entire world capable of producing leading-edge chips at

scale, on the logic side and memory side. we have agreements in place with four of them to expand dramatically here. one just announced a packaging project in indiana. so i think the diversity of firms is remarkable. the last thing is the technologies are really important. each of these firms is bringing the most advanced technologies to our shores. and we have advanced packaging, which is usually important. we have r&d investments happening. intel's investments in oregon have long been a kind of color of american r&d--pillar of american r&d. as result of the chips act we have samsung building r&d in texas. there are only three in the world that do leading processing technology already, taiwan, korea, oregon.

we now have a fourth, samsung is doing it in texas. i think the results are extraordinary. greg: on the work you do, where are we in terms of actual money going out the door, chips being made? when will the first chips start? michael: so first of all, there are chips made in america now. what we don't have is any chips on the leadingdging made right now. as result of our investment, we've said -- set a goal of 20% of leading-edge production by the end of the decade. projecting 28%, so somewhere in that range. we -- if you go to these facilities, what you see is extraordinary. 10,000 construction workers

driving in and out every day, 50 cranes, some of the biggest cranes in the world at these facilities. just remarkable progress. and i think we will see chips being produced out of chips- funded facilities at the end of this year. greg: wow, and of this year -- end of this year? when might that be? michael: eh, i'm not going to get into it. greg: we are in a very aggressive industrial policy and i want to ask questions on that. çmthe u.s. was once the leader n a lot of things, a lot of electronic, not just chipmaking. a lot of that migrated to east asia. for a while we lost our leadership in semiconductors to japan, which launched a huge push, like china is now, a lot oflot of capacity. there was a panic in the united

states very similar to what we see today. and yet 10 years later, japan has more or less lost leadership again, as the inry moved from memory to logic. intel was on top. it kind of looks like a panic was overdone. united states today has done well having pursued a model that more or less turned its back on the industrial policy that is so popular among countries that are not doing well. i guess i want to ask the question, why can't we just trust the market to fix this problem? why are we so fixated on the idea that we have to get in there and steal this incentive allong the market-- steer this incentive allowing the marketer because it has in the past? chris: i think that assumes a world without any wars. the reality is the international environment is■7 anybody reading the headlines out of singapore this weekend where the chinese ministry of defense and the u.s. secretary of defense were speaking, it is

hard to be reassured about the situation between china and taiwan. the difference between the u.s. trade disputes with japan in the 1980's and early 1990's and u.s.-china today is the economic considerations are secondary to the political considerations, what happens if there is a conflict. the reality is we have almost all the leading edge chipmaking in taiwan and a lagging share in china, all of which get knocked off-line the moment a potential escalation begins. to use the phrase "duster policy" ike -- "industrial policy" turns iinto an economic problem, and first in the minds of those in congress who pushed the chips act through, what happens when we lose access supplies of chip making? michael: right now the u.s. produces zero percent of the global supply of leading-edge chips. there is no way that changes,

absent a public policy intervention. so you can decwe ok with that. we have the world's foundational technology critical to militaries -- we haven't talked about ai yet. you are looking at decades where national security, public policy, geopolitics will be shaped by ai. united states is a leader in so much of ai. our workforce, our firms, our ecosystems. we produce enough chips to fuel that boom. again, you can decide that is ok, or you can decide there's security value as a country in building greater rie i guess i - has there ever been a free market in chips, or is it always been heavily government-influenced? chris: certainly in history has been government-influenced, and if you look at subsidies going

to the chip industry, you can look at our friends in asia, but you can look at the largest izer, china. my economist friends talk about a level playing field. that's great. . i asked them to put -- that's a great theory. i can ask them to put that in practice. if that is your starting get back to what mike was mentioning, you can opt into the world and live with the security ramifications of t ok, you mader why semiconductors are special and this is a place where we should industrial policy. one of the reasons we don'tcy is country is we don't have a good track record. we've had like the jones act to protect shipping for a century now. we make less than 1% of the world's ships as a result, andiy high prices for shipping. supersonic transports, god knows how many industrial policy

adventures we had an energy, all of which ended up being gigantic white elephants. what did you learn looking from that history, how do we make sure that the industrial policy with chips does not repeat the mistakes of the past? what do you figure we did wrong in the past that we make sure we don't do now? michael: well, i was the first employee of the chips team back in september 2022. you don't think about this, but major government program starts, there is no infrastructure, there is no model. tim might do this with his adventures in government. but your starting with a blank slate. by the way, from the craft of government standpoint, that was the legislation provides things flexibility. a lot of discretion of the executive branch. it is a question of whether you can make it work. secretary raimondo felt -- i

would say we had to focus on three things early on. number one was people. have to get a goeam in place. secretary raimondo in particular is a magnet for talent, and we built this extraordinary group of people in the chips office. from all walks, private sector, industry, government backgrounds, national security ■aback rents, workforce backgrounds, etc. impossible to do without that. the second thing really important is setting a vision. when you -- it is very easy -- you see this a lot in developing programs that make a whole bunch of investments and try to step back and discern a strategy. i call it like you put the stars in the sky and draw the constellation. we really wanted to take a

different approach, which was not the full constellation, but you should have a sense of what it is going to look like. and we felt accountable for explaining that to the public. we put out what we call our vision for success that talks about in reasonably concrete ways what our objectives are going to be. that required a lot of work, a lot of deep thinking early on, while we were hiring the team and building the department, etc., but we felt it was that important to put that stake in the ground. it's been a really important device for engaging our applicants. our applicants respond to it, they understand what we are trying to achieve, they help us effectuate that vision, but also important internally. internally as we are sitting in investment committee meetings and we are consulate coming back to that vision. -- we are consulate coming back to that vision. we are anchored in what we need to do energy for the country. the last thing is, once you have

the team and division in place, you have to build the pipes of the program, the nitty-gritty, programmatic details that effectuate against those goals. focusing on those three pillars, we have been able to build an operation that at this point at least is on the right track. greg: you mentioned success. what does success look like, and where it is being proximal rank in the criteria of things you look at as a measure of success? michael: it's usually important. i think -- it is usually important.-- it is hugely important. i think it is important that our funding opportunity outlines a set of evaluation criteria. chief among those is economic national security. but right among that are emotional viability and financial strength. we are providing a subsidy --

most of the capital is still coming from the companies. it's really important that it's on a beyond sustainable economic footing. that is the chips act itself, a requirement that we look at that. that is how we will get to a point where hopefully we are creating effective ongoing that we need to achieve our objectives over time. chris: i would add two things. first off, the decision was made early on to provide a small shareholder capital was critical. chips, on average 10ish percent of the capital, which means 90% is borne by the company. they have a strong incentive to get it right. the second is a decision made in the writing of the chips act to fund u.s. firms would also foreign firms investing in the united states, which is not normally when you think of with industrial policy but is critical to having real competition among companies.

we three when it comes to -- producing the best chips sufficiently, that preserves as much of the market as we can get in the program. greg: so from my read of where the industry is on this, all of the design firms, the apples, the qualcomms, the amazons, they are enthusiastic about this, but they are kind of ambivalent about their willingness to actually buy the output of these plants. i feel like this is where the rubber hits the road. you can build a plant, but for that planted to be self-sustaining in the long-term, it needs customers. the company needs to make a good margin. is it the case thati the customers are there and are willing to pay the cost differential for an american-made chip that ensures that these companies will be self sustaining a profitable over the long term and will not

be demonstration plants putting out tiny eyedrop full of chips to prove their american bona fides? chris: from a company perspective, once they put forward the capital expense sure, they have a very strong incentive -- greg: but they've also been very careful not to put that money up front, so their own in a very measured white -- their own capex in a very measured way, their building (s) the into their own plants so they can be there in a few years time. chris: you can talk about the way you are writing the contracts, but it seems to me that that is a positive sign. companies are thinking about this with market dynamics very clearly in mind. they look at the smartphone market, the pc market, and went to move tools into the factory. to me it seems very predictable if you ask a big customer of

companies, would you commit to buying x or y facility, they will say we will not commit to it because there are negotiations. i'm not of allspice we have not had many big announcements from customers saying we will -- i am not at all surprised we have not had many big announcements from customers saying we will buy in advance. there is a lot of examine abou'k richards when there is one 90% supplier and they have cash market -- the companies don't want to market chips when there is one 90% supplier and there isn't a lot of flexibility. michael: our awards are milestone-based. the money goes out over time as chips are produced. we are making sure that as taxpayer money is spent, it is spent as attacks. objectives a -- spent as are being met. the point you raise is a good

and important one, which is that the purpose of chips i part is to close the cost gap so that it is attractive to buyers of the chips. and i think not just in chips, but across the world, we all have a role to play in creating more awareness than there has been in challenges associated with supply-chain resilience. i truly believe that over the cost of fragile supply chains can be priced in. that requires awareness -- telling this story that it requires investors playing that i think that's something i hope to see more and more over time. you see it most acutely in chips right now because chips got --

the narrative out of the pandemic was so immediate and concrete. but i think it's something that needs focus across the economy. greg: to expand on the profitability question, to what extent are yours in the industry's interests aligned? meaning when you put out your requests for proposals, there were a lot of criteria in there that were not explicitly connected to making the ultimate project possible. requirements for on-site daycare for construction workers, union scale wages for unionized workers. cannot use funds to buy back stocks, licensing agreements with china, a lot of things that were very constraining on the freedom -- the degrees of freedom these operators and manufacturers have. and i knowmanufacturers -- i knm talking was a lot of grumbling about that and some republicans voted for the chips act and had buyers request

when they saw what they thought were progressive priorities layered into this. is that not get in the way of ultimate success? chris: in terms -- michael: in terms of alignment, in some sense we both wanted to be successful. in others, they wanted more money. so, the leading edge companies, that was more than $70 billion. more than we had. it took a while to work through that. beyond that, i think, you know, we've been able to work really well together to execute against some shared objectives. as one anecdote, we were at one of the leading edge sites.

we were there for the big announcement and looking over this massive -- like a single one of these sites, they are all bigger than such part massive plots of land. 11 football fields. with 130 football in this country? tens of billions of dollars. by the way, that's where we are putting the childcare facility, you know? and by the way, a lot of these areas are kind of remote. if i had a kid, if i were trying to figure out childcare, that would probably be helpful in attracting a work worse. i think that in that sense, it's been working out pretty well. greg: chris? michael: the result -- chris: in

any program there is a lot of political interest involved in a big part of that is separating it from the -- domestic policy. they did really good job of that. metrics advocacy, to the extent that we can keep these programs insulated from politics, the better that challenge is for congress and a challenge for the administration as well. greg: you wrote in your book -- there were two angles i remembered. getting rich, that was one of theivators for the foundation of the industry. other words, nonunionized. do you think those foundational principles have been diluted by this administration's insistence on profit sharing and union scale? we have seen the reports on how construction in arizona was held up because of conflict with the building trade. i've -- chris: i think the union

issue is nuanced. on the one hand, the critique of being overly burdensome has its affinity. on the other hand, if you talk to the contractors involved and ask them which constrict -- which specifiction trades they are interested in getting, they will talk about unique skill sets where unnization is not problematic and could even be helpful. my view has been more nuanced than a yes or no. i think it is it depends, probably nothing answer you're looking for, but the truth. historically, one of the reasons that ship industry was driving towards less and less regulated markets was because historically labor costs really mattered. today labor costs don't matter that much. that's they reality. these are super automated share of your long-run costs. even at the construction level,

labor is a moderate part of the costa burton. we over index labor costs as to why the u.s. is more expensive than other locations. it's a part of the story. the treatment of capital investment and other factors, they are just as in and our sources of core comparative advantage are policy advantages. prevail -- michael: prevailing wage is a part of the statute and a part of a lot of the federal statutes involved in construction work. just one thing i would say is what we are talking about, and i keep talking about the scale, when each of these sites has 10,000 workers showing up every day, to access that pool of qualified construction workers, i think pulling the industry,

labor, all of these resources achieve this critical national objective is kind of what we should be doing. greg: of course a lot of this is being done with china in china's not sitting still. i want to dig in as we make these strides on advanced chips, the chinese production share in the lagging edge chips is growing. i think it was 17% in 2015, now around 21% is the number i have. it was 17%, now 31%, contract 39% in a few years. these are the chips that we ran out of during. cars sitting unfinished. notwithstanding the progress that has been made, looks to me we are becoming ever more

dependent on china for a crucial park here. another piece that is important, chinese companies are not required to bring back the costs of capital and just the other day we read that the elliott investment hedge fund is pressuring texas instrument on cap x. that's not happening to these chinese competitors. can we seriously like come out ■■ahead in a contest with a country like that, that does not require the primary players to actually make money? michael: i think -- chris: i think that's why we should assume the free market and act on the basis of reality. china just announced■]0z they cd their third investment fund, $45 million in capital. there have been local government funds and provincial government funds and supposedly private equity funds around all of state owned firms. the aggregate what's been put the state owned street in the

last decade has been multiple times higher, vastly higher. the thesis that we should just attend this is a market we should let trade is disruptive to the facts and that's why i wouldn't be surprised if the biden administration increased a freight on input from china with terrace going up a few weeks ago . most chips are imported from the u.s., sent to vietnam, thailand, assembled into goods sent to the u.s. i think we will end should see more effort on that front to deal with the trade issues. like you said, the company is facing calls to reduce. but there's also economic security. china has imposed sanctions on nearly all of its major -- major trading partners in the last decade. we want the manufacturing base to be reliant on chips that are sourced from china? doesn't seem like a smart policy to me. greg: how do you fix that?

michael: i think that the problem is real, let me say that. our team is very much in the market, day to day. and here, you know, how what we are seeing from china is actually impacting prices. it's going to be real and i think it is an issue that buyers serious attention. it's not a complicated issue, because as we said, these are often, chips are often small components of other products that end up being imported. so, what the exact tools are, chips are a part of that. we should say, you're making investment not only on the leading edge, talking about that today, but we have a sick if it can investment in global

foundries that will build the first new greenfield -- not really greenfield -- it's a new fab on their site in new york. a currently mature facility in a couple of decades in this country. you know, it's a part of the agreement, the technology that's particularly critical. national security, like that 22 fdx technology, for example. we have a role to play that and i think we have to look at a broader set of tools. they put out a survey, these are what the supply chains look like. there's a lot of data that needs to be integrated. it's important that we have a software conversation about this issue. i think there's kind of more to come there. greg: thinking through the

chinese calculus here, why is that the china is racing forward to self-sufficiency in chips? your biggest ever year is semi conductors imported from strategic adversaries, taiwan, korea, japan, the united states. it's clear that there is an effort to become self-sufficient case of war, china will have the chips that the manufacturing base requires. i think we should think hard about why china is trying to do that. not only in terms of dollars and cents, companies getting return on capital insulating them in case of the war. maybe it's a sign that we need to do the same. greg: do we need a second chips act? do we need a second chips act to meet additional challenge?

chris: the oec did a study in 20 that at least one chipmaker was receiving more subsidies from foreign governments. no surprise where they were choosing to invest. this is an unacceptable status quo. as far as other governments continue to subsidize, we kept hours impacted. we can debate the right mechanism. greg: mike? michael: for me, personally, one chips act is enough. [laughter] yeah, look, the other what i would make on this, it's a

stunning level of demand for resources, right? we are going to end up, you know, providing far less subsidies then requested in many instances. disappointed, folks, to projects that are worthwhile. we would be strengthening the plot base of the country. in that sense, i do think that additional funding could definitely be put to use productively and i agree with chris, tax credits are important as well. greg: we are nothing only ones doing this. numerous countries have announced similar things since the chips act came out. japan, they are up to 20 billion. france, 5 billion. germany, 17 billion.

is it time to worry about a race to the bottom here where everybody is subsidizing this thing and we end up with too much capacity, too much unprofitable capit disaster? chris: i worry about overcapacity at the leading edge. greg: let me add, it strikes me that all of this is happening in an uncoordinated fashion. bleeding edge, lacking edge, altering the same thing. i worry about that. chris: new facilities every year or so, technologimstructural, se never seen before. i worried a lot about the lagging edge. china, that's where we have no control.

who was winning, it was beijing. that's one way to look at the coordination -- problem. japan, european countries, discussed in a way that we could speak to them. looking at who is investing, there hasn't been a lot of overlap. u.s. investment in the leading edge, with semiconductor's fitting the industrial basis demand. zooming out, is there a lot of overlap? you would be satisfied with the labor. michael: i totally agree and those are conversations that we have had actively with 1000 partners. in the chips office we had a

team dedicated to international engagement to build those relationships. build them directly. ■#■si think that the coordinatis something we will build up. something that is really important. it's a good start. at the u.s. euro trade technology council, it has been a consistent theme at the principal level. of constructive progress on that. if you look at what is happening across the globe, you know, where the investments are happening, it kind of makes sense where the industrial base of each geography is right now. we will continue to work on that overtime. greg: want to have time for questions, but i want to ask one more bhere, it's about workforc.

getting into policy, it's not just making sure the demand is there for the supplies, but in terms of the worce you need skilled, dedicated people with the right training, the right attitude, the right culture, all that stuff. there have been a lot of examples, like tsmc, supposedly the americans don't want to work for long hours that the taiwan he and -- taiwanians do. that was top of mind for them , taiwan, they have the criminal background. every -- creme de la creme. but that's not the case here. i had a conversation with a young gentlen doing a inscienced raised in taiwan.

why study here? worklife balance is important to me, i don't want to work in taiwan where they just assume you willork there for the rest of your life. even the taiwanese are coming here because they have like different things. that's a real challenge. the question to you is, are we ready to meet the workforce challenge? seems like a pretty big deal. michael: i think it's an interesting dichotomy that i perceive. one is yes, of course, it's a new industry essentially from scratch on the leadi edge. you've got to roll up your sleeves and get it done. work with local institutions, community colleges coming, workforce organizations to build the pipeline. the good news about them as they take a while to build them, so while you are doing that you can build that and we as a

government have a role to play. all of our mutual investments include 40 million, 50 million dollars in investments. we will work with local stakeholders to make it happen, right? that is of course a short-term challenge in one that i think we can address. that's one part of the dichotomy. the other piece is, when you zoom out and talk to executives, the strength of the american workforce, the strength of our institutions of higherà education, frankly the strength of ourñsf% economy that just kif homes along -- hums along in a remarkable way, when you look around the world, all of that is a major asset nationally as compies make investment vision . if you are buying a plot of lank

to buildyou are not only thinking about the next three years or five years. you are thinking about the next 20 or 30 years. chris: i would say that an interesting perspective on this question for the u.s. you can get by visitj?ing tokyo or taip, elsewhere, because every ceo in the world says the biggestrkfor. south korea, no one wants to do the chip industry, everyone wants to be a doctor. japan, average age is 55. everyone has a workforce complaint or challenge. when i do step back, i look at where you have the best combination of chip manufacturing in town. the u.s. is by far the world's leader.

end-users, the u.s. is by far the most attractwhich is part of why you see some of these firms opening facilities in places like their. greg: so, we have a couple of folks with microphones here. let's start with steve, over there. >> thank you so much. ■g■pi'm really, lay out their t0 industrial targets for the nation. i have never seen a better orchestration get a hold of government cross finance sectors and industrial planning. my worry about what we are trying to do, having gone from

the obama administration review couldn't say it to being all in, it's not just about chips and a small sliver. you have to create an ecosystem that completely surrounds at what i am failing to seeions of. government focused on this. if you talk to samsung, they will tell you they cannot get the people into the country easily that they feel they nto n within the facilities they are building. i'm interested in what's happening with the whole of government approach, the only way to you make a real industri p scheme and vetted, work, and continue michael: well, let me start with , i will start with where chris left off.

starting with the ecosystem, it's pretty good, right? we have incredible natural resources and abundant energy. a fair amount of water. we have a strong workforce. have a predominant global position in the acquisition of chips on the leading edge. all of that conspires to give us retail ones we are building off of. the question is, what can we do as a government to make sure that we are fueling that oath where the incentive is an important role. buwe build what we call ourhruster support

operations. we've decided, we have a few clusters that will be important to us. let's roll up our sleeves and figure out what we need to do. that could be working with state and la#ocal stakeholders on this like appropriating or could be pulling in other federal reserve. >> [inaudible] that ended up at a dutch firm [inaudible] a lot of the other national lab partnerships [inaudible] out of the so, i don't know what thebut ito

you see that in a healthy way in the u.s. ecosystem? greg: i guess that part -- michael: i guess that part would be another pillar of chips, which we haven't talked about today. 11 billion is focused on building the natural -- natural semiconductor center. the fundamental premise there is to be investing in kind of pre-paradigm shifting technologies with the united states, which the u.s. continues to be at the forefront of in. it all fits together as a part of a broader strategy greg: question bk >> yes, my name is ,

editorial contributor on technology policy for "the hill," recently did an op-ed on this subject. two questions i raised the sort of touched but didn't really get to, at the highest level of extraction and then the lowest, for decades the united states lectured countries like argentina, brazil, protectionism being ethically and practically bad, hurting your consumers and it doesn't work. what do we tell countries today, like india, turkey, brazil, argentina? should they also -- obviously■p germany, britain, japan can do it they want. should they not strive to protect their economies on high-end chips but on other things? jet aircraft, things that they

feel are essential. abstractly, what our orientation on the concept of protectionism after the chips act. at the lowest level of practicality how do we avoid a situation where the companies favored by the u.s. government don't just hire enough admirals, congressmen and whatnot, to ensure that they keeping avery by the u.s. government. isn't this a death spiral you can get into here, there you have a lot of reason chris: there's the economic framework of protectionism being about tariffs and a wartime scenario in which our entire manufacturing base shuts down,

leaving this abstract theorizing to my colonist friends. we are in a30 months of work in russia in the ukraine, tto buy . we've got an extraordinarily severe problem in our industrial base, the entire industrial base being something going wrong between china and taiwan. in my list of priorities in the morning, i were a slightly less about the implications of tariff rate changes and this and that economic. and more on what happens if something goes wrong in the taiwan straits and by the way, it looks like the earlier everyday in the newspaper and that's the overriding focus in the -- of what we are talking about hearing and we can leave these theoretical debates to future professors to analyze. greg: and how do you avoid a scenario where firms are just

winning through lobbying, i guess, would be the way to put it. michael: a couple of things. one, you need to design an extremely rigorous process, which we have done at the chips office. the rigor of comrc scrutiny, strategic scrutiny, financial scrutiny, that is what a lot of us sit across the table from with these companies, saying that we know you can be successful with less than. it's harder to do, but the chief investment officer at 25 years, they are an investor. the whole team that we've built is capable of the conversation. it's a part of the program. as chris